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tv   [untitled]    June 6, 2012 9:30pm-10:00pm PDT

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the utility last possessing rates -- assessing rates. it but i do not have time. thank you. chairperson chu: thank you. next speaker. >> ♪ don't stop to ask ♪ ♪ it's time to make it earthquake safe at last ♪ ♪ you got to find a way ♪ make the money ♪ break out ♪ you've got to find a way ♪ ♪ to make it safe today ♪ brake the money out ♪ bring it back and make it safe ♪ ♪ chairperson chu: any other speakers that wish to comment? seeing none, public comment is closed. and to the speaker that spoke about the difference between the
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revenue bonds ended geobotany, the bonds we are speaking primarily about -- and the geo bonds, but what we're speaking primarily about today are voter backed bonds. you're correct in indicating that there are also revenue bonds that are possible to be issued and the puc has the ability to do so. the puc is proposing to move forward with a number of revenue bonds to pay for sewer repairs, for example, that will be becoming -- will be coming before the board of supervisors. those will move forward without having to go back for a vote as long as two-thirds of the border supervisors actually vote for it. if you have additional information, perhaps not yet can follow up with -- nadia can follow-up with you after board to clarify. in addition, the items we are taking today, which is authorizing the sale of the bonds as well as allowing for
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the appropriation authority is simply that. it is allowing the city to go forward with buying the bonds or issuing debt and then it allows it -- us to spend it, basically. the city will not issue the debt before we have something to pay for. for example, if we are not ready to pay for -- if we have not started construction, we will not borrow money up front. that would be too much money in terms of interest payments that we would want to avoid. if you want additional information about the policies that we move forward with and i am sure nadia's office can provide information to you. thank you for your comments. colleagues, we have items 5 and 6. do we have a motion? we have a motion which recommendation and we can do that without objection. thank you. please call items 7 and 8.
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>> item 7, a resolution of -- approving the authorization of purchase and sale agreement between san francisco and a third party of the sea wall locked in exchange for a portion have a third property. item eight, a resolution amending resolution of intention to establish infrastructure financing district no. two on number 120128 for the city of san francisco. chairperson chu: thank you very much. we have called both items. item seven pertains to sail. eight pertains to the creation
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and infrastructure financing of the district i st. both are related to the sea wall lot 53. we're joined by the president david chiu. we're joined by a number of speakers. and the department will provide a presentation on both of these items appeared before we begin, supervisor chiu, what do you have any comments? supervisor chiu: we had a question about whether we have received of the documents that the port commission had reviewed in front of us. there were issues raised about pala the documents that were considered by the port staff and the port commission were not specifically put into the file today and i just wanted to ask if anyone had a perspective on that and why that was the case and what we ought to do with
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that given that we do not have everything in front of us at the moment. chairperson chu: thank you, president chiu. we did receive an e-mail indicating an electronic records, court documents provided a electronically on our website. if i could ask the city attorney who has also reviewed that email, could you respond to that? gregg's madam chair, deputy city attorney, cheryl adams. i think the question posed was a little bit different. it was whether the agenda had to have the electronic versions of all of the documents that supported the file. the ordinance does not require that. it requires that the file itself be available for public inspection as to the question -- for public inspection. as to the question of what documents you do and do not have relative to the port, i do not know. i cannot speak to that.
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president chiu: i think we received some high-level documents relevant to today's discussion, but there were documents on file that the board staff reported to the commission that are not in front of us today. if the board were to approve our decision, we would be a blessing those documents that are not in front of us. i would like to raise that as an issue that we can discuss but through the course of the hearing. chairperson chu: with regard to moving forward with our items today, item seven and eight, d you see any problems continuing forward based on the conversation today? >> based on the conversation, i do not. chairperson chu: president chiu, and you have any other comments? why do we move on to the presentation. -- why don't we move on to the presentation? >> my name is jonathan stern. i am with support staff and
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development group. i am joined by the project manager for this development project. our cfo and special project manager and executive director as well. i will make a brief presentation and all of us will be available to answer any questions the committee has. i will briefly present the project over all and then the fiscal and financial benefits to the port and the city. maybe i can take a brief moment to try to address the question posed to court staff by president chiu. maya understanding is that lodge with the board are all the documents pertinent to the board's approval. and some primary documents that i believe are not in the file are the development and disposition agreement, the d.a. -- the dda, which is under the
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purview of the agreement application. i would have to defer to the city attorney for a more in- depth definition. but that is minor standing of the lay of the situation. president chiu: in the past projects that we have considered, we always do review the dda. i do not understand why that was not something provided to us as part of today's proceedings. >> i will have to defer to the exact legal reasons for that under the court jurisdiction. but having been part of the exploratory and project, the dda was not considered part of what would be forwarded to the board. president chiu: that might just be a port issue. proxmire understanding is that it is under the port -- the purview of the port commission. but there are other policies that are under the purview of the board and that is what we have here before you. president chiu: i can ask the
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city attorney. do you know why this would not be considered a critical document for us? >> i think there is a difference between being required to provide it to you and whether it is before you. i think the port is saying that the dda is not something before the board for approval. president chiu: even though it can't -- it includes some of the key financial terms we have before us today. gregg's -- >> is a resolution of intent to form an isp. >> moving on, i wanted to briefly present the project in front of you that was approved by the planning commission and port commission and and talk about the financial benefits. this is the area of the waterfront as envisioned by this project overall. starting out with the current site, the current site is a combined site made up of fuel
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lot 3 havret 51, a 90 + persons bait -- a 90 + space parking lot, and the area formerly known as the golden gate tennis and swim club. it is currently operate -- operated by the western athletic club association. there are few buildings on the site. we engaged in this project for the furtherance of the water of front pléneuf sport, which calls for the combination of these two projects -- properties to contemplate residential uses , both residential uses351 and this lot -- both on lots 351 and the area next it.
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this is a particularly important area of the waterfront. currently both jackson street and pacific street that and into the current uses and do not allow the neighborhoods behind them access to the waterfront. but project envisions opening these streets apple to provide access -- these streets up to provide access at three different places to the waterfront. the public space is shown here in dark green. that is another important benefit that the port is seeking with this transaction. there will end up being a public/private ownership with private residential uses on it. we believe this was a good form of transaction that allowed us to negotiate for a public benefit package with the public agency given the land that we on to negotiate with for a decent
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package. the overall uses include 134 housing units in two buildings between washington, jackson, the embarcadero, and drums street. it is one to three city blocks of the project. a second block at pacific prostitutes -- constitutes the swim club, doubling the pool space of the current facility. and then a third block is a smaller block transformed between that part and broadway and the embarcadero. there is about 30,000 square feet of public open space. on the ground floor of both the residential building and recreation facility, there's about 20,000 square feet of restaurants, cafes, and retail facilities. there's a 30,000 square foot aquatics center. there are 255 underground
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parking spaces, or up to two hundred 55 spaces. -- 255 spaces. there are lanes for bicycles and commuters. the waterfront is transformed from a blank surface parking lot to a number of uses along the embarcadero. and the inclusion of the public realms recommendations from the northeast embarcadero steady for activating and beautifying this portion of the waterfront. as i mentioned, but public parking is an important consideration for this area. in 2009, there are approximately 200 parking spaces within walking distance of the ferry building. based on a number of proposals at the proposed project at 75 howard, and most notably, the removal of certain spaces along the embarcadero on the waterside
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at the plaza, appeared two, and pier half, there are a number of spaces that are proposed for been removed. we also have commercial obligations with our partners cannot at the ferry building and at 1.5, 3, and five. our goal is to provide permanent parking for this portion of the waterfront. this would allow us to remove parking over the waterfront and deep water area. about half of the existing parking is potentially being removed in the next few years and we see this as a permanent solution to parking. moving on to benefits, overall we are speaking of a public benefits package in the order of $145 million on a present basis. the first is inclusionary housing fees. the base housing fee and the city's housing fee ordinance is
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about $8.3 million. the developer has agreed to additional payments above and beyond this, totaling -- bringing of the monies for affordable housing in excess of $11 million. president chiu: if i can as just a quick question. i know the affordable housing and remove from $9 million to $11 million. my understanding is that the money was money the port was or to have to repurchase for this, correct? rex the developer's agreeing to an additional $2.2 million in additional housing fees. we did negotiate the sale agreement that is before you. and we restructured this, and his sense of removing the two million dollar up front guarantee. by doubling the back and participation for a transfer fee on commercial and residential condos and increasing the net present value of the
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compensation package. president chiu: i understand it is accurate. it was a little confusing. what i'm trying to get that is that in order for the developer to say that additional two million dollars is going into affordable housing, you changed a lot of financial terms, essentially not requiring the developer to put of $2 million as was previously required in this deal. >> the terms were negotiated and the two million dollars fee was removed from being a fraud. in exchange, the port received 1 per dissipate -- 1% per dissipation in all sales of condos that are residential. it increased its overall ppd, even if you other city fees and taxes from the onetime events of the
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construction and development of this project, about $9 million. about $4 million is from the transfer tax from the initial sale of all condominiums. there is also just under $1 million of other impact fees that would go to the city coffers and the rest are minor taxes, permitting fees, etc. that would bring up to $9 million. there is a property tax that would be brought in. where those funds would flow would be determined later in the process but to calculate, all told, there's about $205 million of property taxes, $54 million in net fell you today, equivalent to about 1.55 million
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per year, escalating as property values increase in that area. payments support is estimated at $14.3 million. i have more details on this later so i won't go into it now. it's important to note that we're also getting $12 million of land. there's about $8.6 million of land, about 23,000 square feet that will be swapped into the trust and held by the port as a trustee for the state of california. there's an additional 9000 square feet the port will receive that won't necessarily be impressed with the trust. we are getting the land in excess of what was considered as part of the trust's exchange. finally, the port lands come almost all of which will become public open space, the cost to improve those properties is $12.7 million.
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as i will discuss later, the developer will pay for up front of those costs. the developer and its successors will take on all park maintenance in perpetuity for these open spaces. we value this at about $175,000 a year in maintenance. finally, outside of the direct public benefits to the port and the city, there are two other components that have been discussed quite considerably as part of this project. first is public parking. public parking that was developed will come at a cost of about $150,000 for parking spaces. that brings us to $38 million construction cost. the developer hasd will bring in about $140,000 per
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space per day which has a net present value of approximately $22 million. there's a subsidy they are building into their development for public parking. president chiu: if i could dwell on that for a second. he said cost about $150,000 per spot. a number of the members of the board of supervisors believe that since this is to be a transit rich neighborhood, we should consider not a 400 car parking garages that requires three levels but a diminishing levels -- let's assume for example we take out 100 spots. to make sure my math is correct, if we did not have those 100 spots, we are saving $59 for the developer? >> it's not just a matter of space, it's about the physical design of the parking grudge.
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-- garage. meeting our contractual obligations and of fulfilling it this requires to plus another 60% of the level. very difficult even if you consider cutting out additional space is to meet those needs and get away with building only two levels. >>president chiu: there are 2.7 like to make. i think -- there are two points i would like to make. if this is bill to the size which is, the parties your contract into parking for have not at all agreed that sufficient to meet the contractual obligations. the second thing is we can have conversations around architectural design, but if you
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remove a level of parking, you create other spaces in those levels because you don't have to worry about ramps or other points of the egress and exits' and entrance into the garage. there are different ways of constructing a parking garages. >> with regards to the parking component, it looks like 255 parking spots currently being proposed for public parking. from my understanding, 150 is related to ferry building obligations. another 25 this to other obligations. we're looking at 175 obligated spaces the port is hoping to achieve through this development transaction, correct? >> we have about 175 spaces we're looking to fill the waterside obligations. about 70 or 80 spaces are required for retail and
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recreational uses and that's how the to under 55 number was arrived. >> 70 to 80 is what the planning department has indicated is necessary to deal with the commercial retail activities in that area? president chiu: one thing based on that conversation -- the 175 is based on contractual discussions that may or may not be felt here. that ate we are talking about is what is needed for retail and other spaces and the -- the 80 we're talking about is for retail and other spaces. the other number is created by quadrupling the parking in that space. you can look at the numbers and a lot different ways. >> that's correct. just to clarify -- i think it was planning that the code analysis for retail and recreation uses. the 127 parking places was
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approved by the planning commission. that's an overall summary of the public benefits. moving on to the payments to the port and payments for the land, the current appraised value is about $9.3 billion. supervisor kim: before you move on, i just want to understand that number. it the value of constructing these spots? >> it is the total differential between the cost to construct 255 spots and the expected revenue from a two mentored 55 spots. fewer spaces are built or allowed to be used. if three levels are still necessary, the construction costs would not change much at all. there might be less equipment to facilitate parking but the revenue would go down and the
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overall gap of the public parking would go up. supervisor kim: in terms of the tax climate -- this is over 30 years? >> it is over 45 years of the lifetime -- supervisor kim: how conservative which you say the assessed value was? >> i think it's relatively conservative. the numbers the developer is suggesting are below their original members suggest in their request for proposals a medal in 2008. i tried to be conservative in including the residential turnover or appreciation rates. growing these between 2% and 3% during the life of the project. president chiu: could you put up
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that last sheet? it's about $144 million. are you aware of the budget analyst believes this number is actually inflated by 40%? >> i believe there is a concurrence of items on a number of sheets and they were not analyzing as a public benefit and i want to put these before the supervisors. this is the department's view of what the public benefits are. i don't think there is much disagreement over any of the numbers but i will defer to my colleagues at the budget analyst. we did not discuss with a budget analyst with your doing the report or additional items, for example, the recreation club which i have not had a chance to mention -- it's a private recreation club. this is not a publicly owned facility. however it has been clear in our
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dialogue that this is a very important asset to this neighborhood. i think it's important to recognize we're taking a recreation facility and doing major improvements on it, doubling the aquatics space and the actual athletic workout space in the club and updating that facility. >> i think we have a different chart that lays out what your numbers are verses what the more real perspective is that we can talk about that is. while i think one might want to associate a value of creating that, we are destroying an existing asset at the same time and an analysis let's not add. why did you continue? -- why don't you continue? >> the sea wall lot of 351 has
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three components. the amount of land being swapped out of the trust to create the development pad between washington and jackson has been valued at about $7.6 million. it increased the value the court currently on spirit based on a number of factors, there are a number of payments sources that comes into that port. we're looking to get capital amounts of money and we balance that with ongoing needs the port has to increase our ongoing revenues. it just ticking through these items, it includes a $3 million land payment transfer fees on the commercial and residential condominiums. this brings the value to about $9 million. ongoing when payments of $120,000 a year escalating with inflation, these are about $2.3
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million. that brings the overall total to 14.3. supervisor kim: i want to get a comparison to the only other project the port has undertaken. i'm curious to the comparison as to the summaries of the payments to the port in terms of how they compared. if you can talk about the participation and how that worked with the water market. >> i'm happy to answer that question. in the water mark transaction, the footprint of that development was approximately half an acre. approximately 22,000 square feet. the forms of compensation, one was an upcoming payment of ab